5/21/2009 @ 4:00PM

It Takes a Business

Khawlhring Vanlalhneha stood on the steps of his tailor’s shop in Aizawl, in northeast India, surveying the morning rush. A customer arrived to order a school uniform for her son. In the summer of 2007, when he and his wife, Lalramchhuani, were first diagnosed as HIV positive, Vanlalhneha couldn’t have imagined that by early 2009 he would own his own, thriving shop.

The couple, too weak to work, were both laid off–he from a tailoring job, she from a beauty salon. Their newborn died of pneumonia when they didn’t have money to take her to a doctor. Their 17-month-old son became malnourished because they couldn’t afford to buy formula to substitute for Lalramchhuani’s now unsafe breast milk.

The family has rebounded physically and financially with the help of FXB, a Swiss charity that helps children with aids or those at risk of being orphaned by aids, by helping their families build microenterprises. FXB figures families such as the Vanlalhnehas have too many problems to get back on their feet through the microloans popularized by Grameen Bank in Bangladesh. Instead, it pays for health care and schooling and stakes the adults to a new business. Then it quickly reduces support. After three years families are expected not only to pay their own living expenses but also to start saving money for their old age.

Both the charity and the model are the creation of Countess Albina du Boisrouvray, a Bolivian tin magnate’s granddaughter who counts Monaco’s ruling Grimaldis among her relatives. (The countess declines to give her age but appears to be in her late 60s.) She kept busy managing inherited real estate and building a movie production company until 1988, two years after the helicopter her 24-year-old son was piloting crashed in the Mali desert during the Paris-Dakar rally, killing all aboard. An experienced pilot who had flown rescue missions in Africa, he was at the treacherous auto race in case any participants needed to be airlifted.

Shaken but determined, du Boisrouvray sold off much of her business holdings, as well as paintings, pre-Columbian gold and silver objects and her country home near Paris, raising $100 million. She put $50 million into conventional charities: a program for terminally ill children in Switzerland, a rescue helicopter control center in the Alps, a center for health and human rights at Harvard University and a professorship at the University of Michigan, her son’s alma mater.

With the rest she launched a new relief charity, Association François-Xavier Bagnoud, named after her only child. “I wanted to continue my son’s rescuing idea, and I applied it to the most destitute children in the world,” she says.

The countess visited areas where children had been orphaned by aids and by wars. “We saw grandparents who were trying to raise grandchildren in extreme poverty,” she recalls. She consulted the experts. She also sat down with Ugandan villagers. As she tells it: “One woman got up and said, ‘If FXB could give me a cow, I could put milk on the table for my grandchildren and I could sell the surplus, and with that money I can pay for their school and other expenses.’”

That planted the seed for what has become FXB’s current model. In the first year it covers all medical and educational costs for the children and their families. In the second it cuts that grant by 25%. In the third by half. All that time, it is working with parents to develop a business, seeded by FXB. By year four a family is expected to do without cash handouts. FXB says a 2007 study of Rwanda participants found by the end of the program 86% of families earned enough to boost them above that country’s poverty level–$1.25 per person a day.

For efficiency’s sake and because of the likely positive spillover effect for a whole village, FXB takes on 80 to 100 families in a single area at one time. The cost per village over the three years has been running $175,000 to $200,000, depending on the country. It works out to $170 on average per person per year but is far less in countries like Burundi, where families are bigger and the money is spread across 700 people. Currently FXB maintains 49 village programs in five countries.

The challenge now is to raise money from other donors as the seed money Du Boisrouvray has invested runs out. Last fall she hired as executive director Peter Neidecker, who had been
Hewlett-Packard
‘s director of global services, planning and delivery. He put in place rigorous ways of monitoring results, down to measuring the food intake of participants. But one of his roles was to raise funds, and the timing proved dreadful. Neidecker was about to meet with one potential donor, the Starr Foundation, when the aig-associated charity said it would slash its giving. Neidecker will be leaving this fall to cut FXB’s nonprogram overhead back to a maximum of 14% of spending.

Meanwhile, as the countess plots her next move, FXB’s work goes on. Early last year it brought its village model to five states in India, including that of tailor Vanlalhneha. His state, which shares a border with Bangladesh and poppy-producing Burma, is on a drug trade route and has a high HIV infection rate. While Vanlalhneha could already sew, FXB helped him learn to stitch suits, which have a higher profit margin, and to open his own tailor shop. His wife opened her own salon, also with FXB help.

What of those without obvious skills? Hmun Hlun Mawii, 27, contracted HIV from her husband, a bus driver who abandoned her in 2006 after a year of marriage. FXB asked her to come up with an idea for earning a living. Mawii asked for a 17-liter can of cooking oil, which she split into small polyethylene bags for sale door-to-door. With the profit she bought vegetables and more oil, and within a month she had (with more FXB help) graduated to her own stall in a popular market.

Around 5 p.m. on a recent evening a pile of potatoes was the only thing left at her stall. She already has her next business plan in place: to buy clothes in Aizawl and sell them in neighboring states, at a markup. Recently she was awarded a bucket for her regular attendance at church. “I’ve been well enough to go every Sunday,” she says with a shy smile.

Vanlalhneha, for his part, has his own way of tracking his success. He knows his monthly income has gone up because his tithe to his church has risen. He is considering expanding his shop and his wife her salon. He says, “Sometimes we forget that we are HIV positive.”